The Collective Investment Schemes (Class B) Rules 2013 (the “Class B Rules”), are intended by the GFSC to be as flexible as possible consistent with meaningful investor protection.

Class B Funds

A fund authorised by Guernsey Financial Services Commission (GFSC) under the Authorised Collective Investment Schemes (Class B) Rules and Guidance, 2021 (Class B Rules) is a Class B fund.

Class B funds are usually, but not necessarily, marketed on a restricted basis to institutional or professional investors. The Class B Rules are essentially a codification of best practice, with reliance placed on disclosure. The Class B Rules lay down requirements as to the information which must be contained in the principal documents but do not impose specific restrictions on investment and borrowing powers and are generally designed to be flexible whilst at the same time reflecting best practice. The overriding requirement is that the assets of a Class B fund must be invested with the aim of spreading risk. The GFSC also has power to derogate the requirements of any of the Class B Rules.


As an “authorised” fund, the GFSC will review the promoter and the fund materials itself, granting authorisation once it is satisfied that the promoter of the Class B fund is suitable and that the fund documentation is appropriate and satisfies regulatory requirements.

The procedure for obtaining approval for all authorised funds (unless fast-tracked as a Qualified Investor Fund (QIF) – see below) involves three stages. The process typically takes between four and six weeks.

Stage 1 – outline authorisation

The first stage is an application on Form GFA to the GFSC for approval in principle. The form details the nature and purpose of the scheme, the proposed administrator, the custodian/trustee and the fees. Submission is usually made by the designated administrator, fund manager or legal adviser acting for the applicant. Business plans should be well advanced prior to application submission. Any provisional matters should be clearly stated, but late changes may result in the application being delayed or, in extreme cases, refused. No prospectus or scheme particulars are submitted at this stage.

Once the GFSC is satisfied that the promoter is acceptable, and the fund is acceptable in principle, an “outline authorisation” is issued. The GFSC aims to issue this within 28 business days of receipt.

Stage 2 – interim authorisation

Stage two is an application for interim consent, Form APB, accompanied by a copy of the near final form prospectus and a copy of any application form the fund will employ. The application form includes disclosure checklists which adhere to the requirements of the Class B Rules. The applicant is asked to indicate on the disclosure checklist how each requirement is satisfied: this is done by identifying the page number of the prospectus upon which a relevant disclosure may be found. Any requests for derogations from the Class B Rules are made at this stage. The non-refundable application fee (see latest fees on GFSC website) must be submitted at this stage.

Once the GFSC is satisfied that the documents comply with certain criteria, an ‘interim authorisation’ is issued. The GFSC aims to issue this within 10 business days of receipt.

Stage 3 – final authorisation

When all the documents are in final form and any queries raised have been dealt with to the GFSC’s satisfaction, the application for final consent is made, together with certified / final copies of all material documents. The documents submitted at this stage would include evidence of the scheme’s incorporation or establishment, service agreements and any scheme particulars. The scheme particulars or equivalent offering documents must evidence:

• An adequate spread of risk;
• Comprehensive risk warnings;
• The investor profile is consistent with the fund’s objectives and minimum subscription levels;
• All material facts, including fees and the names of associated parties, are fully disclosed in the scheme particulars.

The above is indicative, but not an exhaustive list and other criteria may need consideration.

Once the GFSC has received these documents to its satisfaction, a ‘final authorisation’ is issued. The GFSC aims to issue this within 7 business days of receipt. The certificate of authorisation will provide for any formal conditions or derogations from the Class B Rules.

An annual authorisation fee is payable, but is reduced pro rata in the first year of authorisation. The designated administrator is normally deemed responsible for payment of all fees. Current fee scales are set out on the GFSC Fees webpage.

Fast Track Regime and Qualifying Investor Funds

A three-day approval process is available for Class B funds established as a Qualifying Investment Fund (QIF). QIFs are only available for subscription by “Qualified Investors”.

A “Qualified Investor” is defined in the GFSC’s guidance note on Qualifying Investor Funds. This fast track approval process is available to all authorised funds, whether open or closed-ended, other than Class A Schemes (which target retail investors). Like registered funds, the QIF regime relies upon the administrator scrutinising the promoter, ensuring that only Qualified Investors can access the QIF, and verifying compliance with the relevant rules. Again, the GFSC attaches great importance to this. Authorisation will be given by the GFSC on the basis of the administrator’s certification.

The administrator will have an ongoing responsibility to monitor compliance with the matters it has certified and to ensure its rationale for the certification is clearly documented. [See briefing note on QIFs].

Incorporated Cell Companies and Protected Cell Companies

Where the Class B Fund will be an Incorporated Cell Company (ICC) or Protected Cell Company (PCC) a separate formal approval needs to be issued following outline authorisation in order that the vehicle can be registered with the Guernsey Registry. This will not normally be granted until the scheme has reached “outline” stage and requires a specific request from the applicant.

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